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If you are an insurance agent, a steady flow of new prospects is the lifeblood of your business. Building an insurance practice requires significant time and money, and the methods for successfully attracting interested people have changed dramatically over the past several years. Like many agents, you may consider purchasing leads with the hope that another organization's existing marketing methods will yield better responses than your own. The quality of insurance leads from each available source differs dramatically, and understanding these differences can help prevent you from wasting time and money.

Internet Leads

Since many people search for insurance quotes online, you can buy lists of prospects that visited a particular website and requested additional information. The companies that own these websites do not actually provide any insurance services, but instead sell the contact information of visitors to local agents. The concept is sound, but the largest and most relevant concern about buying internet leads is the method used by the vendor to attract visitors. Some unscrupulous internet lead companies trick visitors into providing their contact information by convincing them they have won a great prize. You should never buy insurance leads from companies that utilize false or misleading internet advertisements because you, the agent, will be associated with that underhanded vendor. If you actually sell a policy to a lead acquired in an unprofessional manner, your relationship may contain an air of suspicion and mistrust.

Shared or Exclusive

One of the biggest concerns when buying insurance leads is whether you are the only agent receiving them. Many lead providers will sell the same prospect information to several agents, leaving you to compete with other local insurance provider, which may defeat the purpose of buying the lead entirely. Shared leads typically cost less than exclusive leads, and the number of other agents or brokers in your area who receive the same prospect information will determine if the price is acceptable.

Direct Response

Many lead generation companies utilize direct mail campaigns to find insurance prospects. These companies mail thousands of brochures, flyers, and surveys to lists of consumers and then sell the names of responders to insurance agents. Direct response leads are often more expensive than Internet leads because the providers must recoup their initial mailing costs, but may also be more likely to result in a product sale because the prospect took the time to answer questions and actively respond to an offer for additional information. This would probably not have occurred if there was not a serious or pressing need for insurance.

Telemarketing

Generating insurance leads through telemarketing is a method that has been used for decades, and continues to result in measurable success. The number of people who can be contacted in a short time is extremely high, and the overall cost compared with other lead generation techniques is low. If you do not plan to make telemarketing calls yourself, the cost to buy these leads can be high because of the difficulty associated with making intrusive outbound calls and still finding interested prospects. In addition, a good telemarketing firm will partially pre-qualify prospects on the telephone to weed out results that do not meet your criteria.

Pre-Set Appointments

The most expensive type of insurance lead is the pre-set appointment. Many telemarketing firms will take their outbound marketing a step beyond simply obtaining a list of interested prospects and will actually book an appointment on your behalf, then provide you with the details of the call. This method saves time because there is no need to contact the prospect to arrange a meeting. Pre-set appointments are extremely expensive compared with every other type of insurance lead, but they offer the best chance at successfully selling products because the most difficult part of the sales process has already been handled.

Referrals

By far, referrals are the highest quality type of insurance lead and typically the least expensive to obtain, yet also the most under-utilized. When existing customers send their friends and family to your insurance agency, that prospect is more likely to buy insurance than any other lead type because a sense of trust has already been established by the referrer. Unfortunately, most insurance agents hesitate to ask for referrals, or simply do not know effective methods for generating them.

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About the Author

Gregory Gambone is senior vice president of a small New Jersey insurance brokerage. His expertise is insurance and employee benefits. He has been writing since 1997. Gambone released his first book, "Financial Planning Basics," in 2007 and continues to work on his next industry publication. He earned a Bachelor of Science in psychology from Fairleigh Dickinson University.